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Sinclair Speeds Centralcasting

Group will add News Central to three stations already offering news

By Dan Trigoboff -- Broadcasting & Cable, 1/6/2003

Sinclair Broadcast Group plans to take its ambitious News Central on the road to its stations in Oklahoma City; Raleigh, N.C.; and Rochester, N.Y., during first quarter 2003. Since each of the stations already have news operations, the move signals a change in direction for the centralcast.

The company had said that it would bring the Hunt Valley, Md.-based operation to the group's 30-some markets currently lacking newscasts before the centralcast would come to the some 30 Sinclair stations that have news.

Company spokesman Mark Hyman said Sinclair is "accelerating our schedule on conversions." Converting an existing newscast to one compatible with the centralcast is much easier than building one from the ground up, he noted, but said the company will add several new newscasts this year as well. "We feel more confident that we can [bring News Central to all its stations] in the two-year time frame" that has been its stated timetable.

"We're going into those three markets for a lot of reasons," said Joe DeFeo, who ran news at Sinclair's flagship WBFF(TV) before building the company's multimillion-dollar facility and staff and becoming Sinclair's corporate news director, "including improving content and expanding the news in those markets." While News Central is currently planned as a late-prime time newscast, Sinclair said it could expand into other dayparts.

In those markets, the news will expand from half an hour to an hour, following Sinclair's formula of mixing local, national and international news, with some local segments, particularly weather, produced centrally in Hunt Valley, DeFeo said.

"Flint [Mich.] has worked out very well," he said. "It is the beta test site and has had some little glitches, but not a lot, and not many of the technical problems have shown up on the air."

DeFeo noted that each of the local markets will require capital improvements and production and facility upgrades to make them more compatible with the state-of-the-art Hunt Valley facilities.

Still, the acceleration of News Central into markets where Sinclair has newscasts has led to anxiety within those news departments. "We don't know yet who they're keeping and who they're firing," said a journalist at one station, who said the staff is worried over the change in direction.

Sinclair acknowledged some potential staff reductions, but said there will be more opportunities in other markets and in Hunt Valley. "At the end of the day," Hyman said, "we're going to have more news and more people." DeFeo said he hopes to keep displacement to a minimum.

Sinclair has said all along that it intends to make money with its added news, targeting advertisers that favor stations with news—particularly during the lucrative election seasons—while using efficiencies through shared resources and economies of scale to build many newscasts at lower than typical costs.

 

Semi-Triopoly in Nashville for Sinclair?

Anticipates an FCC revisit of media-ownership rules

Sinclair Broadcast Group may be trying to bridge the gap between duopoly and triopoly in the Nashville, Tenn., market.

The company, which owns Fox affiliate WZTV(TV) and UPN affiliate WUXP(TV) there, has modified an existing outsourcing agreement with WNAB(TV) owner Nashville Broadcasting Limited Partnership. Under the agreement, Sinclair will pay an $18 million nonrefundable deposit toward the purchase price of the put or call option on the non-license assets of WNAB in return for a reduction in the monthly fees Sinclair pays under the outsourcing agreement.

The translation, according to analysts, is somewhere between ownership of two and three stations in the market. That could give Sinclair a head start if the FCC changes its media-ownership rules to allow such combos. Sinclair had no comment on the triopoly strategy.

Sinclair already is providing sales, administrative and technical services to WNAB under the outsourcing deal. The company said the transaction will save it approximately $1.3 million annually. One analyst, who did not want to be identified, said the deal is a good one for Sinclair because it will enhance Sinclair's cash flow while "preserving the de facto triopoly."

"Pushing the envelope used to mean duopoly," noted Bear Stearns analyst Victor Miller (Bear Stearns has a banking relationship with Sinclair). "LMAs used to be controversial. Sinclair may be anticipating the next step, and they're willing to commit. If the structure proves to be too progressive, the company has the right to assign its outsourcing agreement to another broadcaster."

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